Clerk's stamp: IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, as amended

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2 Clerk's stamp: Court File Number Court Judicial Centre Applicants COURT OF QUEEN'S BENCH OF ALBERTA CALGARY IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, as amended AND IN THE MATTER OF THE COMPROMISE OR ARRANGEMENT OF SANJEL CORPORATION, SANJEL CANADA LTD., TERRACOR GROUP LTD., SURETECH GROUP LTD., SURETECH COMPLETIONS CANADA LTD., SANJEL ENERGY SERVICES (USA) INC., SANJEL (USA) INC., SURETECH COMPLETIONS (USA) INC., SANJEL CAPITAL (USA) INC., TERRACOR (USA) INC., TERRACOR RESOURCES (USA) INC., TERRACOR LOGISTICS (USA) INC., SANJEL MIDDLE EAST LTD., SANJEL LATIN AMERICA LIMITED and SANJEL ENERGY SERVICES DMCC SUBMITTED BY PRICEWATERHOUSECOOPERS INC. DATED APRIL 28, 2016 Address for Service and Contact Information of Party Filing this Documents Monitor s Counsel Borden Ladner Gervais LLP Centennial Place, East Tower 1900, rd Avenue SW Calgary, AB T2P0R3 Phone: / Fax: Attention: Josef G.A. Kruger, Q.C./Robyn Gurofsky Jkruger@blg.com/RGurofsky@blg.com

3 TABLE OF CONTENTS 1. INTRODUCTION MONITOR S RECOMMENDATIONS

4 1. INTRODUCTION 1.1 On April 4, 2016, on the application of Sanjel Corporation and the applicants listed in Appendix A in the Monitor s First Report (collectively referred to as Sanjel or the Company or the Applicants ) the Court of Queen's Bench of Alberta (the "Canadian Court") issued an order (the "Initial Order") granting Sanjel protection from its creditors pursuant to the Companies' Creditors Arrangement Act ( CCAA ). Under the Initial Order, PricewaterhouseCoopers Inc. ( PwC ) was appointed monitor of the Company (the Monitor ). 1.2 The purpose of this fourth report (this Fourth Report ) is to provide the Court with: The Monitor s recommendations regarding the respective applications brought by the Company and the Bond Trustee, having regard to the correspondence received by the Monitor on April 27, 2016, appended to the Confidential Supplement to the Third Report, and the factors outlined in that Confidential Supplement as well as the Third Report. 1.3 The Monitor relies upon the First Report, the Confidential Supplement to the First Report, the Third Report and the Confidential Supplement to the Third Report in support of its recommendations set out in this Fourth Report. 1.4 A copy of the filed Fourth Report will be available on the Monitor s website All non-confidential prescribed materials filed by Sanjel and the Monitor relating to this CCAA proceeding are available to creditors and other interested parties in electronic format on the Monitor s website. The Monitor will make regular updates to its website to ensure creditors and interested parties are kept current and to add prescribed materials as required. In addition, the Monitor s website contains a direct link to the website for the Company s U.S. Chapter 15 proceedings. 1.5 Capitalized terms not defined herein shall have the meaning given to them in the Third Report, Second Report, the First Report and the Proposed Monitor s Pre- Filing Report. Unless otherwise stated, all monetary amounts noted herein are expressed in Canadian dollars. 2. MONITOR S RECOMMENDATIONS 2.1 The Monitor indicated in its Third Report that because it was receiving late correspondence from the Company with regards to the April 11 Proposal, and the Bond Trustee outlining their response to the Syndicate Objection, the Monitor wished to weigh all positions and reserve its recommendations until it had an opportunity to review such correspondence. 2.2 Unfortunately, the Bond Trustee s correspondence did not respond substantively to the Syndicate Objection and the Monitor continues to have significant concerns about the viability of the April 11 Proposal as outlined in the Confidential Supplement to the Third Report. As a result, and taking into consideration all information currently available as well as the current financial 3

5 status of the Company, the Monitor s recommendations as outlined in its First Report continue to apply. 2.3 In particular, accounting for: The robust sales process conducted by the Company s various financial advisors, including the BAML process commenced in the fall of 2015 and continued by CS and PJT in early 2016, and the number of parties contacted within that process; The consultation with the Company s stakeholders within that process and the proposals received both from third parties and the bondholders; The nature of the Company s operations and assets; The market conditions for those assets over the past year; The liquidation analysis more particularly outlined in the Confidential Supplement to the First Report; and The ongoing depressed condition of the market; the Monitor is of the view that the process conducted which resulted in the STEP and Liberty APAs was fair and that Company s application to approve those sales is reasonable given all of the factors outlined above. 2.4 The Monitor recommends that the sale approval and vesting orders sought by the Company be granted by the Court. This report is respectfully submitted this 28 th day of April, PricewaterhouseCoopers Inc. Canadian Court Appointed Monitor of Sanjel Corporation et al Paul Darby Senior Vice President 4